Broadcasting revenues down 0.3% in 2014: StatsCan

This past year also marked the first time private conventional TV in Quebec posted a loss since 1991.
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Canada’s TV broadcasting sector posted a 0.3% decline in total operating revenues to approximately $7.57 billion in 2014, down from $7.591 billion in 2013, Statistics Canada reported Tuesday.

The annual report on the TV broadcasting industry showed overall profits before taxes and interest for the sector fell by 22% to $836.8 million in 2014, compared to $1.1 billion in 2013. StatsCan attributed the declines to higher operating expenses, which rose by 3.2% to $6.7 billion. These increased expenses were due primarily to a 5.3% increase in programming expenditures, which hit $4.8 billion in 2014, up from $4.6 billion in 2013.

Operating revenues in the private conventional television sector in 2014 were $1.81 billion, a 7.2% drop from about $1.96 billion in 2013. Operating revenues for public and non-commercial television, however, grew by 2.1% in 2014 to $1.5 billion. The gains were driven by growth in advertising sales to $140.6 million, which helped to make up for a $106 million drop in government grants. Still, public and non-commercial television also experienced a 4.2% increase in operating costs, prompting losses of $22.5 million and a gross profit margin of -1.5%. The profit margin for private convention TV in 2013 was -8.2%.

Specialty television also saw an increase in revenue and drop in profits. Operating revenues in the segment grew by 4.2% to $3.4 billion but profit before interest and taxes dropped by 7.5%. Operating expenses for specialty TV increased by 9.1% to $2.5 billion on higher programming costs. On the pay TV side, the segment posted an operating revenue of $822 million, a drop of 5.7%. Still, pay TV posted a gross profit margin of 11.8%. Pay TV and specialty TV, which had a profit margin of 26.6%, were the only segments that posted a profit in 2014, the report notes.

The StatsCan report also noted advertising sales in the TV broadcasting sector continued to drop this past year, by 0.8% to $3.4 billion. Overall, airtime sales have dropped by $190.9 million from 2011 to 2014, the report said. Private conventional TV’s share of the advertising sales market was 48.9% in 2014 – the first time the segement’s sales markets share dropped below 50%. Specialty TV had 36.7% of the advertising sales market in 2014, with public and non-commercial television taking 14.4%. However, declines in advertising sales in 2014 were somewhat offset by a jump in revenues from subscriptions to $2.9 billion, representing a 5.5% increase.

This past year also marked the first time private conventional TV in Quebec posted a loss since 1991. The segment recorded a loss of $12.3 million in 2014, while it posted a profit of $24.2 million in 2013. The loss in the segment was attributed to a 8.9% decline in operating revenues to $393.1 million, with operating expenses dropping only 0.4% to $405.4 million.

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